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Global equities have been shaken as a flattening U.S. Treasury yield curve - a result of a steep fall in longer-dated yields - fanned recession jitters and as U.S.-China trade conflict woes resurfaced after a temporary lull.

Signals from the Federal Reserve last week that it may be nearing an end to its three-year rate hike cycle has pushed the 10-year U.S. Treasury yield to three-month lows below 3 percent.

Concerns about slowing U.S. growth have accelerated the flattening of the yield curve, a phenomenon in which longer-dated debt yields fall faster than their shorter-dated counterparts.

The spread between the two-year and 10-year Treasury yields was at its flattest level in over a decade.

A flatter curve is seen as an indicator of a recession, with lower longer-dated yields suggesting that the markets see economic weakness ahead.

"The U.S. economy is likely to be able to withstand another rate hike or two, therefore the flattening of the Treasury curve looks a little over done. That said, it is true that the economic outlook is murkier than before," said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management.

"There is also Brexit to keep an eye on, and this is a factor in the ongoing risk aversion."

British Prime Minister Theresa May suffered embarrassing defeats on Tuesday at the start of five days of debate over her plans to leave the European Union that could determine the future of Brexit and the fate of her government.

The dollar sagged in the wake of falling Treasury yields, with its index against a basket of six major currencies briefly stooping to a near two-week low of 96.379 overnight before edging back towards 97.00.